Difference between layer-2 and layer-3 switch

Switch plays an import role in the network where we connect the end points. Switches basically is a hardware device that filters and forwards network packets from one networking device (switch, router, computer, server, etc.) to another.  A Layer 3 switch is a switch that performs routing functions in addition to switching while Layer 2 switches basically do switching only, which means they operate using devices’ MAC addresses to redirect the data packets from the source port to the destination port. Layer 3 does routing using IP addresses. Layer 3 switches have fast switching capabilities and they have higher port density.

In a layer 3 switch, the devices can communicate within as well as outside the networks while with L2 Switch, devices can communicate only within the same network. With L3, you can create multiple instances of LAN, while with L2, you can create only one LAN. 

Difference between a Router and an L3 Switch

Router: This is Microprecessor based engine device and it contains a motherboard which is capable of doing the software routing. The routing speed in a Router is slower as compared to the L3 Switch while on the same time a router supports more routing features as compared to the L3 switch. Router is basically desined to use in WAN and have WAN Interface, router however can also be used for LAN. 

L3 Switch: This is a Application Specific Integrated Circuit (ASIC) based engine device, which does Hardware routing(Packet Switching). L3 has limited routing features compared to a router. L3 Switch is designed to use for LAN only or campus area network.